NEW YORK (Reuters) – The S&P 500 barely closed on positive Wednesday as an expected stimulus deal and falling unemployment claims prompt investors to put their money into sectors most likely to benefit from the reopening of the economy as it recovers from the global health crisis .
While blue chip Dow and small caps led the way, tech-heavy Nasdaq ended the session lower.
Economically vulnerable cyclical stocks, which were battered by forced shutdowns and will benefit the most from the economic recovery, outperformed.
The switch to cyclical effects reflects growing confidence in the recovery from the pandemic recession and started in fits and starts after promising late-stage vaccination data was released in early November.
“It’s a very welcoming sign to see rotation taking place in downtrodden sectors,” said Matthew Keator, managing partner of the Keator Group, an asset manager in Lenox, Massachusetts. “It talks about the importance of valuation and the importance of diversification.”
“It also speaks to the hope out there,” added Keator. “When you see oil rising and the travel and tourism industry picking up again, that speaks to the market ahead and prices in that hope.”
The possibility of a year-end freeze from the US administration and the absence of new fiscal stimulus measures surfaced after President Donald Trump threatened to veto a $ 2.3 trillion financing package that also included a highly anticipated $ pandemic deal. 892 billion.
A Brexit trade deal between Britain and the European Union seemed more likely after a senior European diplomat told Reuters an agreement could be imminent.
A series of mixed economic data showed a welcome decline in jobless claims and an increase in new orders for durable goods, as well as a decline in consumer spending, a decline in personal income and a waning sentiment as the Christmas shopping season draws to a close amid a resurgent pandemic.
But languid inflation data provided further assurance that the US Federal Reserve is likely to maintain its accommodative monetary policy through at least 2024.
The Dow Jones Industrial Average rose 114.32 points, or 0.38%, to 30,129.83, the S&P 500 gained 2.75 points or 0.07% to 3,690.01 and the Nasdaq Composite fell 36.80 points, or 0.29%, to 12,771.11.
Of the 11 main sectors in the S&P 500, all but real estate technology and utilities closed the session in black.
Pharmacist Pfizer Inc rose 1.9% after a deal with the United States to deliver an additional 100 million doses of their COVID-19 vaccine by July.
Supernus Pharmaceuticals Inc was up 14.6% after the experimental drug for Attention Deficit Hyperactivity Disorder reached the main goal of a late-stage study in adults.
Shares of Nikola Corp fell 10.7% after it sent off a deal to develop electric garbage trucks with recycling and waste management company Republic Services Inc.
American Airlines Group and United Airlines Holdings were up 2.6% and 2.7%, respectively, after revealing plans to bring back staff this month. The airline industry hopes to receive about $ 15 billion in salary support as part of the ongoing fiscal package.
There were more problems than the diminishing problems on the NYSE at a ratio of 2.38 to 1; on Nasdaq, a ratio of 1.73 to 1 was in favor of progress.
The S&P 500 posted 33 new highs in 52 weeks and no new lows; the Nasdaq Composite registered 280 new highs and two new lows.
The volume on the US stock exchanges was 12.22 billion shares, compared to the average of 11.52 billion over the past 20 trading days.
Reporting by Stephen Culp; Editing by Cynthia Osterman